NACE / ISIC 62
Computer programming,
Consultancy And related activities
Updated Sector Paper
27th Voorburg Group Meeting
October 1-5, 2012
Warsaw, Poland
Ruth Vizner, CBS Israel
Topics
• Introduction
• Industry Overview
• Classification
• Turnover Statistics
• SPPI
• Summary and Main Conclusion
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Introduction
History For Computer
• During the 1990's studies from UK, Canada,
New Zealand and Czechoslovakia
• 2002, 2003 Mini Presentation on SPPI and output
from INSEE, UK, Sweden, Australia and Canada
• 2007, 2008 papers from France, Sweden,
Netherland and the United States, results with a
Sector Paper on Computer Programming,
Consultancy and Related Activities by the BLS.
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Results of Survey among NSOs
ISIC/NACE
62
SPPI
TURNOVER
6201 Computer Programming
Activities
15
21
6202 Computer Consultancy
and Computer Facilities
Activities
16
21
6209 Other Information
Technology Services
10
21
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Industry Overview
• The industry is growing in the last years
• The market is dynamic, providing different
•
•
•
•
•
service products
companies rapidly change the structure and
content of services provided
unique, bundled services
Secondary activities
subcontracting, off-shoring
providing services in-house
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Industry Overview
Revenues in 2010
Germany - 80.8 billion euro
Japan - 11.4 trillion yen
Canada - 33.2 billion dollar
Spain - 21.8 billion euro
Korea - 23.9 billion dollar
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Size of industry
Distribution of revenues among groups ISIC 62
ISIC
Austria
Sweden
Norway
Estonia
Hungary
Slovakia
6201
46.4
46
19.9
56
33
31
6202
42.8
40
79.7
24
28
24
6209
10.8
14
0.4
20
39
45
ISIC
Germany
Croatia
Singapore
Czech
Korea
Slovenia
6201
45.5
67,5
48
45.7
70.7
33
6202
35.3
17.1
44.4
40.3
29.3
47
6209
19.2
15.4
7.6
4
-
20
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Classification - Industry
ISIC 4
NACE 2
6201 Computer Programming 62.01 Computer Programming Activities
Activities
6202 Computer Consultancy
and Computer
Facilities Activities
62.02 Information Technology
Consultancy Activities
62.03 Computer Facilities
Management Activities
6209 Other Information
Technology Services
62.09 Other Information
Technology Service
Activities
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Classification - Industry
NACE 2 / ISIC 4
NAICS US/Canada
6201 Computer Programming
Activities
541511 Custom Computer
Programming
Services
541512 Computer System
Design Services
6202 Computer Consultancy
and Computer Facilities
Activities
541513-Computer Facilities
Management
Services
6209 Other Information
Technology Services
541519 Other Computer
Related Services
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Classification - Industry
all three classification systems are similar.
NACE and NAICS specify Computer Facilities
Management Services as a separate industry.
ISIC combines this business activity with Computer
Consultancy.
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Classification – Products
CPC vs. NAPCS
CPC
NAPCS
83131 IT technical consulting services
35000 IT technical consulting services
83132 IT technical support services
35501 Software related technical
support services
35502 Hardware related technical
support services
35503 Combined hardware and
software support services
35504 Auditing and assessing
computer operations
35505 Data recovery services
35506 Disaster recovery services,
business continuity services
35507 Other IT support services
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Classification – Products
CPC vs NAPCS
CPC
NAPCS
83141 IT design and development services
for applications
35050 Custom computer application design
and Development services
35051 Web site design and development
services
35052 Database design and development
services
35053 Customization and integration of
cross-industry application software
35054 Customization and integration of
vertical market application software
35056 Other custom application design and
development services
83142 IT design and development for
networks and systems
35101 Computer network security design
and development services 35102 Computer
network design and
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Classification - Products
CPA vs ISIC
CPA
2008
Computer Programming,
Consultancy and related Services
6201
62.01
Computer Programming Services
62.01.11 IT design and development for
application
62.01.12 IT design and development for
network
62.01.21 Computer game’s software
original
62.01.29 Other software original
6202
62.02
Computer Consultancy Services
62.02.10 Hardware consultancy services
62.02.20 System and software
consultancy services
62.03
Computer facilities management
services
62.02.30 IT technical support services
62.03.11 Network management services
62.03.12 Computer systems
management services
62.09
Other information technology and
computer services
62.09.10 Installation services of computer
and peripheral equipment
62.09.20 Other information technology
and computer services i.e.
ISIC Rev.
4
6209
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Turnover Statistics
progress
 All countries collect and publish turnover data
 Most countries collect turnover data at the product





level and publish at the industry level
All counties moved to the new classification
European counties use NACE v. 2 and CPA 2008.
North America countries use NAICS and NAPCS
Australia use ANZIC
Some countries use a local version based on ISIC
Rev.4 (Japan uses JSIC, Korea KSIC, Singapore
SSIC)
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Turnover Statistics
data collection
 Most countries use survey
 The frame is the Business Register
 Method for selection of companies is stratified sampling
 according to size of turnover / number of employee /
combination.
 Some use combination of survey and administrative data
 Few countries use census.
 detailed data of industry and product level are available
on SBS statistics
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Turnover Statistics
Challanges
Challenges stem from the dynamic nature of the
industry and the change in classification
 Finding a predominate activity according to the new
classification
 Merger and acquisitions and new products and
services
 Outsourcing
 Companies have a lot of secondary activities
 Confidentiality issues for multinationals companies
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Recommended Approach
Category
Data Source
Level of Detail
disadvantage
s
advantages
Best
Survey/Census
Industry
turnover
detailed and
product
turnover detail
-Most
expensive
- response
burden
detailed
information on
a timely
manner
Good
Survey/Census
or combination
Industry detail
only
Expensive
-Industry detail
not sufficient
-less response
burden
Minimum
Administrative
(tax data,
industry
association
data etc.,)
Industry detail
only
-Least
expensive
-Little or no
respondent
burden
- Imperfect
Estimates
- Not timely
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SPPI
• 16 of 21 countries have SPPI
• 10 of 16 countries cover all 3 groups
• 16 countries cover 6201 and 6202
6 countries don’t cover 6209
• 12 of 16 countries collect prices and
publish on a quarterly basis
• 3 countries, Czech, Japan and Korea,
collect prices monthly and in Canada the
index is Annual.
•
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Pricing method
The most dominant is charge out rate
 Characteristics of workers: professions, skill
level, experience
 Characteristics of service: kind of service, type of
software, project and clients
 All countries uses time based method for group
6201 computer programming services. For the
other groups other pricing methods are used:
contract pricing, direct use of prices of repeated
services
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Pricing method
Pricing method
Example
Subgroup
Time-based
Hourly charge-out rates for chief
programmer for analysis
6201
Direct use of prices for
repeated services
Security services for network
6209
Percentage fees
Percentage of software licenses
6202
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Main pricing issues
 subcontracting or outsourcing - charge out rates
might not be good estimates of real price change when part
of the job outsourced, especially when the subcontractor is
an off-shore establishment. The solution is to take in account
the off shoring effect and to reflect the change in labor
composition in the charge out rates.
 internal prices - companies that offer IT services inhouse. Company-internal prices are in general difficult to
handle for index calculation because the price development
isn’t always comparable to the development of market
prices.
 Changes in the labor productivity - are to be
excluded from the charge out rates.
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Recommended Approach
Category
Pricing method
Data type in the
survey and frequency
Advantage
Disadvantages
Best
Prices for
repeated
services,
Real transaction prices,
The information
is available,
specification
allow comparison
over time.
response burden
is moderate
Not possible for unique
services
(costume software)
May not reflect
productivity changes
Specification must be
defined to Keep
Price based on expert
estimates. By using a
fictitious service or a
real service as a model
Holding constant
quality
High response burden
Need to be updated
frequently
The contract must
specify the service
Revenue and amount
sold / time spend
Least expensive
lowest response
burden
Services must be
sufficient homogeneous
Price changes can be
highly volatile
- Time-based
methods
Good
Model pricing
Contract
pricing
Minimum
Unit value
The price for
the time spent on the
service is used as a
proxy for the real price
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Summary
 Much progress has been done in the last years, since the last





Sector Paper on Computer Services, both in SPPI and
Turnover data
All counties moved to the new industry classification
The most dominant pricing method is charge out rates
It is recommended that charge out rates will be based on
detailed specification that identifies both the workers
qualifications and the service definition
Constant quality SPPI present a challenge for computer
services.
Future improvements include effort to improve company’s
cooperation
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Thank You Very Much!
RUTH VIZNER
MAIL: VIZNER@CBS.GOV.IL